Consumer Confidence Index – Nebraska and Survey of Nebraska Business:
May 6, 2016
Prepared by the UNL College of Business Administration, Bureau of Business Research
Author: Dr. Eric Thompson
Summary: Business expectations remained strong and consumer confidence stayed weak during
April. These findings, based on monthly surveys of both Nebraska households and businesses,
show a split assessment of the state economy. In particular, the Consumer Confidence Index –
Nebraska (CCI-N) stood at 92.2 in April, little changed from its value of 91.0 in March. However,
consumer confidence is well below the value of 100 which would signify neutral confidence.
Households report a variety of financial concerns with three in five indicating that their primary
financial concerns relate to the cost of living including health care costs, taxes, major expenses
(furniture, appliances, automobiles or college tuition) and the general cost of living. By contrast,
respondents to the April 2016 Survey of Nebraska Business have a positive outlook, with strong
expectations for sales and job growth at their businesses over the next six months. The outlook
for sales is strong but down from the March survey. To be specific, 32 percent of businesses
expect sales at their business to rise over the next 6 months, while just 15 percent expect sales
to decline. In terms of employment, 18 percent of responding businesspeople expect to increase
employment while just 3 percent expect to reduce it. This employment outlook is up slightly
from the March survey. When asked about the most important issue facing their business,
customer demand is mentioned most frequently, followed by the availability and quality of
labor.
Consumer Confidence Index - Nebraska
The Consumer Confidence Index – Nebraska (CCI-N) summarizes responses to the Survey of
Nebraska Households regarding household financial situation and the environment for making a
major household purchase. Respondents provide their assessment of both current conditions
and expectations for the next 6 months. The Survey of Nebraska Households is sent to 500
households each month. The survey asks respondents whether: 1) their household is better off
financially now than it was six months ago 2) they expect their household to be better off
financially in six months, 3) whether they believe now is a good time to make a major
household purchase (automobile, appliance, or electronics) and 4) whether they expect it will
be a good time to make a major household purchase 6 months in the future. The survey also
asks a fifth question “What is the most important financial issue facing your household today?”
Individual responses to that question fall into one dozen categories. In April, responses were
received from 68 of the 500 surveyed households, for 14 percent response rate.
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The Consumer Confidence Index – Nebraska is estimated based on responses to the first four
questions. For each question, the share of respondents indicating that they are worse off (or
that it is a bad time to make a major household purchase) is subtracted from the percentage
who indicate they are better off (or that it is a good time to make a purchase). The number 100
is added to the difference in percentages. A value of 100, therefore, indicates that households
are neutral, since a value of 100 would only arise if the same share of households declare that
they are better off as declare that they are worse off. A value above 100 indicates strong
consumer confidence. A value below 100 indicates weak consumer confidence.
The Consumer Confidence Index – Nebraska is the average of the values for the four questions.
Therefore, a value over 100 for the CCI-N indicates strong consumer confidence.
As seen in Table 1, the Consumer Confidence Index – Nebraska had a value of 92.2 in April
2016. This value is well below 100 and suggests that Nebraska households have weak consumer
confidence. Such weak consumer confidence likely reflects stagnant real wages in Nebraska
(and the United States as a whole) over most of the last fifteen years. The consumer confidence
index was little changed from its value of 91.0 in March.
Table 1: Consumer Confidence Index - Nebraska, April 2016
Consumer Confidence Index - Nebraska
Month
Index Value
April 2016
92.2
March 2016
91.0
Change from Previous Month
1.2
Figure 1 shows household responses to the question about the most important financial issue
they face. The most common issues raised in April responses are major expenses (furniture,
appliance, automobile, home repair or college tuition) and the cost of health care or health
insurance. Both issues are raised by 17 percent of respondents. These top issues point to a
wider concern about the cost of living. Fifty-seven percent of respondents choose some type of
cost factor as their top issue, whether major expenses (17 percent), health care or health
insurance costs (17 percent), the general cost of living (13 percent) or taxes (10 percent).
Appoximately one in five respondents choose paying off debt (13 percent) or savings (8
percent) as their top issue. Among other issues, 9 percent mention their level of wages or
income while 5 percent mention concerns about their job situation or their own business.
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Figure 1: Most Important Financial Issue Facing Nebraska Households, April 2016
20.00%
17%
18.00%
17%
16.00%
14.00%
12.00%
13%
13%
10%
10.00%
9%
8%
8.00%
7%
5%
6.00%
4.00%
1%
2.00%
0%
Other
Financial Market Performance
Major Expense
Cost of Living
Concerns with Employment/Business
Cost of Health Care/Insurance
Level of Wages/Income
Social Security/Medicare
Saving
Paying Off Debt
Taxes
0.00%
Note: Percentages may not sum to 100% due to rounding
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Survey of Nebraska Business
The Survey of Nebraska Business is sent to 500 Nebraska business establishments each month.
The survey asks business owners and managers whether they expect to expand sales and
employment over the next 6 months. The survey also asks “What is the most important issue
facing your business today?” Individual responses to that question fall into one dozen
categories of business and public policy issues. Surveyed businesses are randomly selected from
all industries, including agriculture. Businesses of all sizes are surveyed. In April, responses were
received from 103 of the 500 surveyed businesses, for a 21 percent response rate.
As seen in Table 2 below, respondents to the April 2016 Survey of Nebraska Business have a
strong outlook for sales and employment at their businesses over the next 6 months. For sales,
32 percent expect sales to increase over the next 6 months while 15 percent expect sales to
decrease. This is a positive 17 percent gap. For employment, 18 percent of April respondents
expect to add jobs over the next 6 months versus just 3 percent who expect to reduce
employment, a positive 15 percent gap. The outlook for sales is less robust than in the March
survey while the outlook for employment improved relative to March.
Table 2: Business Expectations for the Next Six Months, April 2016
Change Over the Next Six
Months
Sales
Employment
Increase
32%
18%
Stay the Same
53%
79%
Decrease
15%
3%
Note: Column totals may not sum to 100% due to rounding.
Results in Figure 2 show the top concerns of business owners and managers responding to the
April survey. The concerns are similar to those expressed in the March survey. Three quarters of
responses are related to business operations issues such as customer demand for goods or
services, the cost of supplies, labor availability and quality, competition from other businesses
or the need to improve business practices. Customer demand is the most common top concern,
named by 29 percent of respondents. The availability and quality of labor is the second most
cited top concern, chosen by 23 percent of respondents. One quarter of businesses choose a
public policy issues as their top concern. Government regulations is chosen by 11 percent of
respondents, while taxes is chosen by 8 percent and access to credit by 3 percent.
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3%
1%
3%
Minimum Wage
Other
0.00%
3%
Weather/Drought
1%
Access to or cost of capital
8%
Competition/Improve
Business Practices
3%
Poor Government Policy
11%
Government Regulation
5.00%
Health Care Costs/ACA
10.00%
Taxes
25.00%
Labor Availability and Quality
15.00%
Cost of Goods and Services
30.00%
Customer Demand
Figure 2: Most Important Issue Facing Nebraska Businesses, April 2016
35.00%
29%
23%
20.00%
11%
6%
Note: Percentages may not sum to 100% due to rounding
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